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Dixons Carphone profits soar during lockdown

Electricals division sees sales climb 15 per cent as home appliance demand overcomes mobile slowdown
Dixons Carphone profits soar during lockdown
  • Pandemic buying sees electricals division sales jump 15 per cent to £4.5bn 
  • Dividend remains suspended despite strong sales

It wasn’t just coffee makers people stocked up on this year to help to cope with Covid-19 conditions. That was the message from Dixons Carphone’s (DC.) interim results, with sales way up across appliances and electronics.

The company’s free cash flow surged more than five-fold to £499m compared to last year, although this was boosted by working capital movements and VAT deferral.

The retailer has not brought back its dividend despite the rise in sales and profits, however, and said lockdown rules had cost it around £155m in pretax profit, because of lower-margin online sales and hygiene measures. This was balanced by £103m in government support through furlough payments. 

The full-year numbers will likely be more subdued, with consensus estimates compiled by FactSet putting adjusted earnings per share level on last year. While this is a promising bounce from Dixons, retailers are not out of the woods yet. Sell. 

DIXONS CARPHONE (DC)   
ORD PRICE:128pMARKET VALUE:£ 1.5bn
TOUCH:127.2-128p12-MONTH HIGH:155pLOW: 54p
DIVIDEND YIELD:NAPE RATIO:NA
NET ASSET VALUE:198p*NET DEBT:49%
 Half-year to 31 OctTurnover (£bn)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20194.71-86-62.25
20204.86451.5nil
% change+3---
Ex-div:NA   
Payment:NA   
*Includes £3.3bn in intangible assets or 286p a share

Last IC View: Sell, 87p, 15 Jul 2020